A non-merchant seller passes the risk of loss to the buyer when the goods are received.
The First Amendment to the United States Constitution contains two (2.) separate
religion clauses: 1. the Enlightenment Clause; and 2. the Free Exercise Clause.
An insurance agent and insurance broker are essentially the same, and have the same
legal relationship with the companies they represent.
A small corporation will typically choose the state in which the corporation will be
doing most of its business as the state for incorporation.
A “choice of forum” clause automatically determines that the forum nation’s laws are
applied in settling a dispute.
Under the Sherman Act, horizontal price-fixing arrangements are per se illegal.
Acceptance of a part of any commercial unit constitutes rejection of the entire unit.
The uniform disclosures required by the Truth in Lending Act and Regulation Z are
intended to help consumers shop for the best credit terms.
Because a state has a duty to protect its citizens and a right to regulate intrastate
commerce, a law prohibiting the direct sale of goods to its citizens by out-of-state
retailers is constitutionally valid as long as the sale can be made to in-state wholesalers
who then sell to the state’s citizens.
A lessor is the person who transfers the right of possession and use of goods under the
lease.
Impossibility of performance occurs if the contract becomes subjectively impossible to
perform by one of the parties.
In an assumption of duties, the obligee can sue the delegatee and recover damages from
the delegatee for nonperformance or negligent performance by the delegatee.
Under the doctrine of conditional liability, a plaintiff may recover punitive damages if
the defendant’s conduct has been reckless or intentional.
Punitive damages are not recoverable in cases of actual fraud.
Under common law, employers could terminate an employee for any reason.
The United States Constitution itself provides that it may be amended to address social
and economic changes.
A disclaimer of opinion expresses the auditor’s inability to draw a conclusion about the
accuracy of the company’s financial records.
Uniform Commercial Code Section 3-104(f) defines a check as an order by the drawer
to the drawee bank to pay a specified sum of money from the drawer’s checking account
to the named payee (or holder).
Personal property that is permanently affixed to land or buildings is called integrated
property.
In the United States, the law, equity, and merchant courts have been merged.
The CAN-SPAM Act represents a deregulatory approach to government oversight of
the Internet.
State common law decisions have had a larger impact on contract law than federal
common law decisions.
In a limited liability partnership, a limited partner whose negligent or intentional
conduct causes injury is not personally liable for his or her own conduct.
Under UCITA, available remedies are specifically enumerated and the parties do not
have the right to limit remedies in their contract or licensing agreement.
Although the assignor often uses the word assign, other words or terms such as sell,
transfer, convey, and give are sufficient to indicate intent to transfer a contract right.
Assume a drawer gives an incomplete check to a payee without including the amount of
the check, and the payee completes the check by filling in a higher amount than that
authorized by the drawer; if the bank pays the check according to the unauthorized
terms, the drawer is generally liable for payment of the check as completed.
Diversity of citizenship cases may be brought in either state or federal court.
Since contract law applies a “reasonable person standard,” an agreement does not
require a “meeting of minds” of the parties.
A qualified indorsement can be either a special qualified indorsement or a blank
qualified indorsement.
Bankruptcy judges are elected for four-year terms.
It is acceptable to discover a trade secret by reverse engineering even if the owner of
the trade secret has taken all reasonable precautions to prevent discovery of the secret.
The United States Constitution requires federal, state, and local governments to be
neutral toward religion.
What options does a payee have who is holding a check payable to her?
A) She must seek payment directly from the drawee bank.
B) She must seek payment on the check, either directly from the drawee bank or by
depositing the check in her account at her own bank.
C) She may seek payment form the drawee bank, seek payment by depositing the check
in her account at her own bank, or she may indorse the check to another person, so long
as the indorsement has been approved by the drawer.
D) She may seek payment from the drawee bank, seek payment by depositing the check
in her account at her own bank, or she may indorse the check to another person, so long
as the indorsement has been approved by the drawee.
E) She may seek payment from the drawee bank, seek payment by depositing the check
in her account at her own bank, or she may indorse the check to another person, and
such indorsement does not need the approval of the drawer or drawee.
Historically, the bailee must exercise what level of care in a bailment for the bailor’s
exclusive benefit?
A) utmost
B) minimal
C) ordinary
D) strict liability
E) reasonable
Under ethical ________, a person looks to a(n) ________ source for ethical rules or
commands.
A) fundamentalism; inside
B) fundamentalism; outside
C) fundamentalism; religious
D) absolutism; inside
E) absolutism; outside
The Ku Klux Klan has announced that it wishes to conduct a parade though “Anytown”,
USA. Despite assurances that the intent of the parade is to conduct a peaceful march
and passive demonstration, the majority of citizens in “Anytown” do not want the
parade to take place. Can the governing body in “Anytown” prohibit the parade? What
are the constitutional ramifications that must be considered with regard to freedom of
speech?
Which of the following is not one of the most commonly used top-level extensions for
domain names?
A) .info
B) .biz
C) .us
D) .home
E) .bz
A plaintiff wants to sue on a negligence tort, but knows that he was partly as fault.
Which of the following is true?
A) A state applying contributory negligence will allow the plaintiff to recover so long as
his fault is less than 30%.
B) The plaintiff will have to elect whether to sue under comparative or contributory
negligence.
C) Because the plaintiff is partly at fault, he will not be able to recover under either
comparative or contributory negligence.
D) If the plaintiff’s fault is only 25%, his recovery will be the same under either pure or
partial comparative negligence.
E) In all circumstances, the plaintiff will recover more under partial comparative
negligence than under pure comparative negligence.
Mike hates Kathy because she won’t date him. He decides to kill her so he watches her
house for a few days to determine her habits and routine. He notices that her bedroom
light goes on every night at 11:00 p.m. and goes off at midnight. At 12:30 a.m. he
approaches her window and silently opens it. He walks to the bed and pumps two shots
from his gun into the bed. To his surprise, feathers fill the room and he discovers that
the bed was empty. He leaves and goes to a bar. After a few drinks he pulls the gun and
tells the bartender to hand over the money in the register. The bartender hands him the
money but starts crying so Mike slams the butt of the gun on the bar to shut her up. The
gun goes off and Tom, sitting at a corner table is killed. What crimes has Mike
committed?
Which of the following is the most accurate statement regarding the tort of
disparagement?
A) The plaintiff must show that the defendant maliciously made an untrue statement
about the plaintiff’s products, services, property, or business reputation.
B) The plaintiff must show that the defendant published to a third party an untrue
statement about the plaintiff’s products, services, property, or business reputation.
C) The plaintiff must show that the defendant knew the statement he or she made about
the plaintiff’s products, services, property, or business reputation was not true.
D) The plaintiff must show that the defendant:maliciously made an untrue statement
about the plaintiff’s products, services, property, or business reputation;published that
untrue statement to a third party.
E) The plaintiff must show that the defendant:maliciously made an untrue statement
about the plaintiff’s products, services, property, or business reputation;published that
untrue statement to a third party;knew the statement was not true.
Which of the following would be granted the greatest priority?
A) a secured lien
B) a perfected secured lien
C) a mechanic’s lien
D) an unsecured lien
E) a purchase money security interest
What is the consequence of holding a special shareholders’ meeting after giving proper
notice to some, but not all, shareholders?
A) All actions taken at the meeting are effective, unless one of the shareholders who did
not receive notice objects.
B) Any actions that received enough overall shareholder support that they would have
been approved even if the shareholders not receiving notice had attended and voted
against them are effective, and all other actions are not effective.
C) The action can be made effective only through ratification by the board of directors.
D) All actions taken at the meeting are not effective.
E) All actions taken at the meeting are valid, unless a special meeting was involved, in
which case all actions taken are invalid.
An adequate assurance of performance may be demanded:
A) orally.
B) in writing.
C) by conduct.
D) orally or by conduct.
E) in writing or by conduct.
The entity with jurisdiction to enforce the most important and comprehensive trade
agreements in the world today is the:
A) General Agreement on Tariffs and Trade.
B) Security Council of the United Nations.
C) American Arbitration Association.
D) World Trade Organization.
E) International Court of Justice.
Generally, if two creditors have unperfected security interests in the same collateral,
which has the superior right in the collateral?
A) the first to have filed
B) the first to attach
C) the first to sue the debtor
D) the first to repossess the collateral
E) they have equal priority
The requirement that the terms of the acceptance be the exact same as those of the offer
is the:
A) mirror image rule.
B) identical terms rule.
C) counteroffer equals rejection rule.
D) doctrine against offer modifications.
E) promissory estoppel doctrine.
In a trademark infringement case:
A) the plaintiff need prove only that its mark was used in an unauthorized manner.
B) the plaintiff must prove actual damages to prevail in the suit.
C) the plaintiff must prove that the unauthorized use is likely to cause confusion,
mistake, or deceive the public about the origin of the goods.
D) treble damages are not available.
E) the plaintiff must prove he or she registered the trademark before the defendant.
Suppose a qualified African-American applies for a particular job and is rejected for
that job simply because of his race. Assume further that the employer keeps the position
open and hires an equally-qualified white person. This would be a case of which of the
following types of discrimination?
A) disparate treatment discrimination
B) pattern of practice of discrimination
C) disparate impact discrimination from a facially-neutral rule
D) sex discrimination
E) This would not be illegal discrimination.
________ credit is a situation in which a collecting bank gives credit to a check in the
collection process prior to its final settlement.
A) Provisional
B) Conditional
C) Certified
D) Accommodating
E) Deferential
Under the UCC, who holds the risk of loss in an ordinary lease during transit?
A) supplier or vendor
B) lessor
C) lessee
D) common carrier
E) bailee
In terms of the jurisdiction of federal courts, diversity of citizenship occurs if a lawsuit
involves:
A) citizens of different states.
B) citizens of different races.
C) a citizen of a state and a citizen or subject of a foreign country.
D) citizens of different states or citizens of different races.
E) citizens of different states, or a citizen of a state and a citizen or subject of a foreign
country.
A motion for a change of venue would typically be granted where:
A) a court does not have personal jurisdiction over the plaintiff.
B) selection of an impartial jury would be unlikely at the original venue location.
C) the party losing a case would like a retrial in another location.
D) the judge committed errors in a trial.
E) a court does not have subject matter jurisdiction.
A filed financing statement remains in force for a period of:
A) five years from the date of filing, unless it is extended.
B) four years from the date of filing, unless it is extended.
C) six months from the date of filing, unless it is extended.
D) ninety days from the date of filing, unless it is extended.
E) ten years from the date of filing, unless it is extended
Certified public accountants must comply with two (2.) uniform standards of
professional conduct. They are ________, which are standards for the preparation and
presentation of financial statements, and ________, which specify the methods and
procedures that must be used to conduct audits.
A) BAAPs; BAASs
B) CAAPs; CAASs
C) DAAPs; DAASs
D) GAAPs; GAASs
E) MAAPs; MAASs
Which of the following insurance provisions requires an insured to pay a percentage of
the cost of an insured loss?
A) an endorsement
B) a rider
C) a deductible clause
D) a coinsurance clause
E) an indemnity clause
State unfair competition laws allow the owner of a trade secret to bring a lawsuit for
________ against anyone who steals a trade secret.
A) appropriation
B) misappropriation
C) fraud
D) embezzlement
E) robbery
Which of the following is not one of the common committees found on boards of
directors?
A) audit committee
B) nominating committee
C) litigation committee
D) dividends committee
E) executive committee
Liquidated damages under the UCC:
A) are not permissible.
B) are permissible any time both parties have agreed to them.
C) are permissible only if other remedies are inadequate.
D) are unconscionable.
E) are permissible if they are reasonable in light of the anticipated or actual harm
caused by the breach, the difficulties of proof of loss, and the inconvenience or
non-feasibility of otherwise obtaining an adequate remedy.
A stock certificate is an example of:
A) tangible, personal, private property.
B) intangible, personal, private property.
C) intangible, real, private property.
D) intangible, personal, public property.
E) tangible, real, public property.
What is the definition of “goods” under Article 2 of the UCC?
A) “Goods” are defined as tangible things that are movable at the time of their
identification to the contract.
B) “Goods” are defined as intangible things that are movable at the time of their
identification to the contract.
C) “Goods” are defined as tangible things that are immovable at the time of their
identification to the contract.
D) “Goods” are defined as fixtures.
E) “Goods” are defined as intangible things that are immovable at the time of their
identification to the contract.
Sandy purchases a piece of equipment to use in her business. The seller of the
equipment extended credit to Sandy to enable her to purchase the equipment. Sandy
signs a security agreement, but the seller of the equipment does not file a financing
statement anywhere. Sandy defaults on the loan, and the seller of the equipment wants
to get possession of the equipment. The amount owed to the seller of the equipment is
Sandy’s only debt. Can the seller repossess the equipment?
A) no, because the equipment is not classified as consumer goods
B) no, because the seller did not file a financing statement
C) yes, because there is a valid security agreement
D) yes, because there is automatic perfection
E) yes, but only if the seller gets a deficiency judgment against Sandy first
According to Black’s Law Dictionary, quoted in the text, law can be defined as:
A) the actions that a person is not allowed to perform.
B) a body of rules of action or conduct prescribed by controlling authority.
C) what an individual believes to be fair and just.
D) the persons responsible for the enforcement of society’s rules.
E) the justification for the redistribution of wealth.
Martha is elderly, does not speak or read English very well, and is unsophisticated in
business matters. A salesman convinces her to sign a negotiable note by telling Martha
that it is a receipt for his visit. The salesman properly negotiates this note to a holder in
due course, who tries to collect from Martha. Martha’s defense to this note is:
A) breach of contract, a personal defense.
B) fraud in the inducement, a real defense.
C) fraud in the inception, a real defense.
D) extreme duress, a real defense.
E) illegality, a real defense.
Why should employees be able to receive workers’ compensation payments even if they
are hurt through their own negligence?
Mary is an assembly line worker at a computer company. Mary becomes aware that an
improvement is being made to the company’s primary computer that will significantly
increase profits. Mary tells a friend to buy stock in the company, but instructs her not to
tell anyone else. The friend buys stock, but tells two other persons to do the same. The
company’s profits increase greatly, and all three who purchased stock sell at a
tremendous profit. Discuss this situation.
Should UCC Article 2 and Article 2A apply to services? What are the benefits and
difficulties that would arise if UCC Article 2 and 2A applied to services?
Jackie went to a copying center that also had computers that could be rented and used in
the store on an hourly basis. Each computer was in a separate cubicle and sat on a small
desk. Jackie signed up for a computer and went into her assigned cubicle. On the back
left corner of the desk was a gold bracelet. On the floor under the desk was a silver
ankle bracelet. On the floor by the trash container was a paperback dictionary. Discuss
Jackie’s claims to the bracelets and the dictionary.
Manny, Thelma and Louise all work at the same factory. Manny has been there for ten
years, Thelma for five years, and Louise for approximately one year. They receive a
base wage, plus one dollar for each widget that they assemble. They sit at the same
table, work the same hours, and assemble the same widgets. One day, Manny
announces that he is taking his family to Europe for a vacation. Thelma and Louise ask
how he can afford such an expensive vacation, and he responds that his wages are more
than adequate for him to have enough funds for the vacation. When they start
comparing income, they find that Manny makes $100 more per week than Thelma, and
that Thelma makes $50 more per week than Louise. Both Thelma and Louise are upset,
and the two complain to the human resource department. Has the factory violated the
Equal Pay Act?
Susan is part owner of one of the best restaurants in a medium-sized city. This
restaurant is operated as a partnership. In October 2010, the local newspaper published
a story about Bill, who is Susan’s business partner in the restaurant. In this article it is
stated that Bill’s net worth is several million dollars. About ten days later, Susan
receives a summons notifying her that the restaurant is named as the defendant in a
negligence case. The plaintiff in the case alleged that she slipped and fell to the floor
inside the restaurant near the rear door late one night in December, 2008. According to
the plaintiff, she slipped on water from snow that had been tracked in and had melted.
The plaintiff also alleged that there were no employees or other customers in sight of
the back door when the plaintiff slipped and fell, and that she was leaving the restaurant
when the accident occurred. The plaintiff did not notify anyone at the restaurant when
the accident occurred or at anytime thereafter prior to the filing of the lawsuit. Although
most diners at the restaurant make reservations in advance, and pay with a credit card,
the restaurant has no records of reservations or payment by the plaintiff. The plaintiff
claims to have paid with cash. Susan and Bill have heard about alternative dispute
resolution and would like to know more about how it works and about its advantages
and disadvantages. If you were the attorney for Susan and Bill, what would you explain
to them about mediation and arbitration, including their advantages and disadvantages?
What would you recommend to them?
Local Air is a small, locally-owned heating and air conditioning repair business.
Business has not being going well, and Local Air’s owner is contemplating bankruptcy.
The owner is concerned, however, about the complexities and time involved in filing a
traditional Chapter 11 bankruptcy. Assuming that Local Air has under $2 million in
debts, what non-traditional Chapter 11 option is available for small businesses, and how
does that option work?
With the remedies of attachment and execution allowing access to a debtor’s assets
where there is no security agreement, why would a party go to the trouble of securing a
loan?
Oliver, a student at Well Known University, has bad manners and a bad temper. One
day Susie, another student, accidentally bumped him in the hall. Oliver completely lost
his temper and hit Susie in the back as she walked away. Susie did not see Oliver hit
her, but several witnesses confirm that he did so. Susie reported Oliver to the school
administrator. The school administrator threatened to expel Oliver. That infuriated
Oliver. Oliver began making threatening phone calls to Susie at all hours of the night
insulting her and making outrageous statements regarding her appearance and character.
Oliver also wrote an editorial in the school newspaper to the effect that Susie told lies.
Finally Oliver sued Susie for assault and battery. Susie counterclaimed for assault,
battery, the intentional infliction of emotional distress, slander, and libel. What claims
are viable and why? (Note”assume that both Oliver and Susie are over the age of
eighteen)
In a contract dispute, would a non-merchant benefit more from the provisions of the
UCC Article 2 and Article 2A or under the common law?
Are there any special antitrust concerns that arise when one product becomes
standardized and a basis for other products, such as a computer operating system that
becomes the basis for software applications?
Is the perfect tender rule too harsh? Why should a party be able to reject an entire
shipment for a very minor nonconformity? Does this work against one of the main
policies of the UCC, namely to encourage the formation and performance of contracts?
Steve is known for buying everything on credit. He typically has a dozen regular
monthly payments on installment debt. He might have couch payments, mattress
payments, stereo payments, and coffeemaker payments all at the same time. He sells his
dining room table and chairs to Bob, his friend. A couple of months later, the furniture
company that sold the table to Steve shows up at Bob’s house to repossess the table,
because Steve has stopped making payments on the debt he incurred in purchasing the
table. The furniture store claims it is entitled to the table, because it has a purchase
money security interest in the table which automatically perfected when Steve
purchased it. How would this case turn out?
Jan has decided to buy an abandoned chemical plant and revamp it to produce specialty
plastics. Discuss some of the environmental issues that she most likely faces.
Forger drafted a promissory note and forged Fred’s signature on it. Before he could do
anything with it, Thief stole it, and transferred it to Commercial Loan Co., for value.
Commercial usually did not buy commercial paper from people who walk in off the
street, but business was slow, so they took it. Commercial had no actual notice of the
forgery, but the manager in charge thought the circumstances were suspicious. On the
note’s due date, Commercial demanded payment from Fred. Obviously, Fred refused to
pay. Commercial sues Fred on the note. Assuming the note qualifies as a negotiable
instrument in all aspects not mentioned above, discuss the probable outcome of this
suit.
When a business has a dispute with another business, there is often the option of
seeking recovery through litigation or the use of ADR. What benefits might a business
realize by using ADR rather than filing suit?